I know it’s summer and everything, but let’s face it– I’m a New Yorker. I’m not much for gardening or working in the yard. Nevertheless, I recently found myself battling the forces of nature in preparation for an upcoming outdoor barbecue, trying to singlehandedly turn an overgrown, out of control patch of jungle into own of those tame, manicured, Hampton-like lawns. With all the sweating and cursing, the endless labor and the distinct lack of progress, it felt about like a day in the music business, during what has to be the deadest, most uninspired period I’ve ever seen during 25 years in this industry.

In a summer that has seen continued dismal record sales, falling publishing incomes, the crash of the touring business, and worst of all, the tragedy at Love Parade in Germany, the whole music biz seems stuck in the kind of dreary, gray blanket of stale air that has hung over NYC for most of the summer. It’s hot, uncomfortable and nothing’s moving.

Even Billboard seems to be struggling to come up with anything to fill the pages. Last week they ran an article about a consortium of European banks who are partnering with Universal Music, to offer a discount subscription for music downloads with the opening of every new bank account or charge card. Out of 200 participating banks in Germany, 6,000 people have signed up. That’s 30 people per bank. Jeez. 30 people? And they wrote an article about it? Must’ve been a slow news day.

Staring out at a wild, unruly, tangled mess of a field, it’s not easy to leave the lawn chair and get out the weed-whacker, but we’re quickly nearing the point of no return. It’s August, and the fourth quarter is about to kick in. Somehow, the industry has to find a way to start at least laying the groundwork for better times ahead. Undeniably, it’s been a bad year in the fields. Still, we have to start doing the obvious work to get something growing again:

Step One: Take Control

Nature abhors a void. Even when it looks like nothing is happening, something is going on. Right now, even as the music industry stands still, other more dynamic businesses, from social networking companies to Apple to mobile networks to investment companies are expanding their influence, grabbing our audience, choking off some of our own opportunities and redefining the entertainment landscape on their terms, not ours.

It’s incredible that even after losing control of the music industry to MTV way back in the 1980s, then losing it again to illegal file-sharing in the first part of this decade, and yet again to Apple and iTunes in the second half of the decade, the record companies and music publishing companies have still not offered up anything to even attempt to control the playing field in their own industry. Streaming didn’t originate with record labels or publishers. Neither did the iPad or YouTube. Given the extent to which they’ve benefited from it, why did a music publisher not come up with a TV-show like “Glee” years ago?

If we don’t want to think beyond making music, then we can rest assured that someone else will. Then they, not us, will decide how our product is marketed, distributed, and sold, as well as what price it will sell for.
Don’t believe it? Notice how 80 years later we’re still going hat in hand to the radio industry, begging them to play our records (and in the case of the record industry, wishing they would actually pay us something to do it). Why does every new initiative in the music business seem to revolve around piggy-backing on someone else’s innovation, like making a channel on YouTube or taking an ownership share in Spotify? If you don’t control your turf, someone controls it for you.

Step Two: Clear out the dead.

You can’t hope for much new growth until you get out the wheelbarrow and start cleaning up the mess. This is actually one huge advantage for new, small companies entering the business. At least they’re starting fresh. The great burden being carried by all of the major music corporations is the fact that they have little choice but to manage the slow death of the CD, and the whole traditional business model that surrounds it. Everyone knows that it’s on it’s way out. If they could, they’d kill it off entirely. But the truth is that it’s still the primary source of income. No one can afford to abandon it. Consequently, too many resources go into keeping the dead man walking, while the infant survives on whatever is left.

For those who are still forming their overall business strategy, this is an opportunity to embrace a new model, free of the ties to the past that are strangling the industry’s major players. Take advantage of it. You don’t have to build your business around manufacturing CDs, or getting radio airplay, or trying to place songs on million-selling albums, or focusing on your own home territory simply because that’s what everyone has always done. Those old branches of the tree quit growing years ago. Anyone trying to hang onto them is going to be hearing a distinct cracking sound in the next five years.

Of course, abandoning the old ways of doing business means you’ll have to come up with new ones. That’s never easy. But it’s easier to create something new and alive if you’re not spending 80 percent of your time trying to resuscitate something dead.

Step Three: Look at what grows naturally.

None of us are completely in control of our own fate. Sometimes you decide what will grow in your garden, and other times, no matter how hard you try, the garden decides what will grow. We all have to adapt to our environment, and the faster we do it, the easier our life will be.

Part of the reason the music business continues to struggle is that it’s been determined to force results out of a market that simply doesn’t want what it’s offering. People don’t buy albums. Fine. Sell them something else. The audience is constantly shifting and losing interest. It’s frustrating, but it’s nature. Give them a constant stream of new songs, rather than ten new ones every two years.

In most cases, the marketing strategies that have worked recently, from mixtapes to YouTube videos to mashups to blogs, have grown up naturally out of their environment. Meanwhile, the field is littered with millions of marketing gimmicks, from “enhanced” CDs to special “fan club” subscriptions, that emanated from corporate planning sessions, only to dry up and wither when they ran into a skeptical and disinterested fanbase. If it’s not happening at a grass-roots level, then the grass won’t grow. Work with the forces of nature, not against them.

Step Four: Plant a seed.

A few years ago, I decided to plant some trees. Being the impatient city boy that I am, I decided the bigger the better. I bought trees that were already at least half grown, planted them, then looked around and admired my efforts. Within a few days, I had a garden that looked as if it had been growing for years. Within three months, I had a garden full of big, dead trees.

Later, an Englishman (and hence, a genetically gifted gardener) suggested that instead I should buy some tiny little saplings. The theory was that if they died, I’d hardly notice. At the same time, being very young, they were more likely to adapt to the soil and eventually start to grow. So far anyway, it seems to be working.

Much of the reason that the music industry has failed to discover new technologies on its own, or clear out the old failing business models, or even jump on trends that have taken root at street-level, is that the large corporations that dominate the field want things to be too big, too fast. Faced with the pressure of producing quarterly results, they can’t wait for a new idea to grow. Just as they can’t afford to nurture artists through a three or four album development, neither can they nurture new business strategies or marketing initiatives that could take years to pay off.

Again, those just now staking their claim to a tiny spot on the music business landscape have a real edge here. If you keep your overheads low and your expectations reasonable, you can afford to let nature take its course. Try your new idea in an inexpensive, low-risk way. Take a deep breath or two. If it doesn’t take, it’s no great loss. But if you see it growing, you can patiently nurture it along, until it suddenly has a life of its own.

Last weekend at the barbecue, I spoke with a friend in the garment business, who has a clothing company in New York. He explained to me that even fifteen years ago, there were dozens of manufacturers, tailoring shops, pattern-makers and fabric factories throughout the country who created garments for a wide variety of clothing lines. Today, there are virtually none. Trade policies, wage pressures from developing countries, outdated union rules, organized crime, and short-sighted management policies combined to essentially eliminate the industry. We’re not talking about a tough business cycle. The dress-makers, weavers, tailors and other specialists have left the country or found other work. The machines have been sold off. It’s not coming back.

Industries do die. It’s not enough to reassure ourselves that “music will always exist”. Sure. But will the music industry? It didn’t exist much before the 1900s. It doesn’t have any guarantees for the future. Another six months has come and gone, and nothing is happening. Sooner, rather than later, we better get out the shovel and start digging our way out of this mess.

    Thanks Eric Beall!
    I read your this post its a amazing.you give us 4 steps is very good thanks a lot

    I think your points are all valid, but has anyone done a study on aggregate revenues for music? I ask, because with licensing for film, TV and advertising on the rise, plus sampling for re-use etc., I would guess that as much money as ever is being made from music, it’s just that record companies and centralized/consolidated publishers are seeing a smaller percentage of the total take than they used to. Thoughts?

    Jeff

    Glad you found it helpful. In many ways, the people looking at entering the music business now have a big advantage, in that they aren’t working with a lot of the baggage that is weighing down the more experienced players. You don’t have to figure out how to work within the current system– you can be part of inventing a new way of doing business. Don’t give in to the conventional wisdom or try to emulate what has worked in the past. Go for it!

    Thanks for weighing in.

    Best,

    Eric

    Whoa– just saw this– and it looks like you’re playing tomorrow night. I don’t think I’m going to be able to make it, but if I can, I’ll try to get there. Hope the gig goes great!
    Will definitely keep an eye on “Not a Planet”…

    Best,

    Eric

    Thanks for all your support. I did meet up with Saint– great guy and a very interesting meeting. He’s doing very good work.

    In regards to the blog, you’re right– that fear factor is very real. Interestingly, it’s actually much more severe, and for good reason, among the big established players in the industry than the up and comers. After all, the guys who have had success have the most to lose. They’re also the most sure of the old method. For younger, less proven people, there’s no great risk in trying something different. It’s all about staying open, and watching what’s happening at a street level with your audience.

    Keep up the good work. Always great to hear from you.

    Eric

    Wish it were true– but it’s not what I, or anyone I know is seeing in their daily experience. The reality is that licensing fees are plummeting– an enormous amount of television is being done on a gratis basis, especially with all of the production libraries willing to license for nothing and simply live off the performance fees. At the same time, film fees are dropping significantly, as even superstar acts are forced to rely on sync income, rather than mechanicals. Classic songs that would have been completely unavailable at any price a few years ago are now being licensed for under six figures, simply because sync income is the only game in town. For unknown songs, the fees have fallen by probably 50% over the past three years. Advertising uses have held up better than the other two areas, but even that is obviously affected by general economic factors in the recession. When you add in the disappearance of the CD compilation business, sales levels that are dropping by 30% per year, and the dwindling ringtone business, it’s pretty hard to see how the overall numbers would add up to anything approaching the numbers of five or six, or certainly ten years ago. Unless you factor in the profits being generated by services that use music but don’t pay anything significant for it (YouTube, file-sharing sites, etc.) I don’t think we’re holding steady.

    You do bring up an interesting point: many of the sites that are using music, and in some sense marketing music, from YouTube to Pirate Bay to MySpace, do not really consider themselves, nor does the industry ever treat them, as part of the music business. Even radio has more of a position in the music business than many of these services do. And yet, this where the bulk of the next generation is going for their music. At some point, we either have to bring them into the industry, or realize that the industry just moved to the building next door, and now we’re the outsiders looking in.

    As always– great to hear from you. Hope all is good. Thanks for weighing in.

    Eric

    Glad it was helpful. Thanks for reaching out. Look forward to staying in touch.

    Best,

    Eric

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